|
CITY OF VANCOUVER ADMINISTRATIVE REPORT |
Date: |
April 27, 2004 | |
Author: |
Carol Ann Young | |
Phone No.: |
604-6042 | |
RTS No.: |
04066 | |
CC File No.: |
5104 | |
Meeting Date: |
May 18, 2004 |
TO: |
Vancouver City Council |
FROM: |
Director of Social Planning in consultation with the Directors of Legal Services and Real Estate Services |
SUBJECT: |
Sub-lease for Childcare at Lot 2 of the Public Harbour of Burrard Inlet - 201 Burrard Street and Childcare Endowment Start-up |
RECOMMENDATION
A. THAT Council approve a five-year sub-lease for the childcare space at 201 Burrard St, legally described as Lot 2 of the Public Harbour of Burrard Inlet, Plan LMP51876, to the Vancouver Society of Children's Centres (VSOCC), renewable for two further five-year terms, for the purpose of a 37-space licensed childcare centre at a nominal rate ($1), subject to terms and conditions as outlined in this report and on terms satisfactory to the Directors of Social Planning, Legal Services, and Real Estate Services;
B. THAT Council authorize the allocation of $3,500 to the City-owned Childcare Facilities Maintenance annual budget for maintenance services, without offset. Source of funding to be contingency reserve; and
C. That Council approve up to $74,000 start-up funding to the Vancouver Society of Children's Centres to cover the start-up costs for the childcare programs at the new Shaw Tower. This grant is to be disbursed over the period September 1, 2004 - August 31, 2006, at the discretion of the Director of Social Planning. Source of funds: City Childcare Endowment Reserve.
GENERAL MANAGER'S COMMENTS
The General Manager of Community Services RECOMMENDS approval of A, B and C.
COUNCIL POLICY
The Civic Childcare Strategy, approved by Council in October, 1990, recognized the need to ensure the availability of start-up and operating subsidies to sustain those new childcare facilities being opened in high density neighbourhoods, as a result of rezoning negotiations or City initiated projects. In May 1991, Council approved the creation of the Childcare Endowment Reserve.
In June, 1993, Council directed that City-owned properties occupied by non-profit organizations be held as assets in the Capital fund and be charged a nominal rent. The lease/sublease/license of City assets below market value constitutes a grant and, as such, requires eight affirmative votes.
On December 15, 1994, Council approved the terms and conditions of the Childcare Endowment Reserve, including eligibility criteria and the process of accessing these funds.
In September, 2003, Council directed staff to utilize the framework for agreements outlined in the September 11, 2003, report for all future leases/subleases/licenses to non-profit organizations occupying capital assets.
Approval of grant recommendations requires eight affirmative votes.
PURPOSE
The purpose of this report is to seek Council's approval to enter into a sub-lease with VSOCC, to operate a 37-space licensed childcare program, consisting of 12 infant/toddler spaces and 25 three to five year old spaces in the new Shaw Tower. It also seeks Council's approval for start-up funds for the first two years of the program's operation and an addition of $3,500 for City maintenance services.
BACKGROUND
As part of the Coal Harbour/Marathon lands rezoning in the early 90's, two agreements for childcare were negotiated between the City and the developer - one for a 37-space childcare facility and a second pay-in-lieu contribution equivalent to a 49-space child care facility to be placed in the Childcare Endowment Fund. In addition, VSOCC was established as a non-profit society by the City to operate developer built City-owned facilities. It was intended that VSOCC would operate the 37-space licensed program on completion on the Marathon lands and would receive operating assistance through the Childcare Endowment Fund.
Over the past 18 months, the City and VSOCC staff, Community Care Facilities Licensing staff and the developer's architect designed an exciting childcare environment, consistent with the City Childcare Design Guidelines, in the new Shaw Tower. The program will open in September, 2004.
DISCUSSION
In order for VSOCC to operate the childcare programs in the Shaw Tower, City staff must have Council's approval to enter into a sub-lease agreement. Staff are recommending that the City enter into a sub-lease agreement with VSOCC, on the terms and conditions set out in Appendix A, approved by Council in September, 2003.
Experience has shown that the long-term quality and viability of childcare services are positively impacted when adequate time and resources are allocated to the start-up phase of the project. Costs include equipping and licensing of the childcare facility, development of the management infrastructure, program development and community liaison. Start-up funding has been provided for the other City owned childcare facilities operated by VSOCC. The start-up allowance of $2,000 per licensed space allows for the facility to be open and ready for use and the facility's operational effectiveness in the initial start-up years.
In addition, the estimated annual operating deficit for the program at Shaw Tower is $32,200. The program at Shaw Tower will have 12 infant/toddler spaces, which requires a ratio of 1:4 staff to children, making this type of care the most expensive to provide. The actual cost to deliver an infant/toddler licensed space in a VSOCC facility is approximately $1,600. per month per child; however, parent fees are about $1,000. While the Provincial government provides an operating grant, on average, of $220. per month, per enrolled child, there is still a significant shortfall. VSOCC will depend on City Childcare Endowment Reserve Funds to offset the majority of the shortfall and staff will bring forward the Childcare Endowment Reserve Report later this year.
FINANCIAL IMPLICATIONS
The Childcare Endowment Fund currently has a balance of approximately $4,100,000. Initial start-up funds of up to $74,000 are required. As with other City-owned childcare centres, the City's Building Management staff will provide basic preventative maintenance services. Staff estimate the annual costs of this service to be $3,500 per year and Recommendation B seeks an increase to the Facilities Maintenance annual operating budget.
CONCLUSION
Staff support a sub-lease agreement of Lot 2 Burrard Landing, 201 Burrard Street between the City and the VSOCC for the purposes of a 37-space licensed childcare facility. In addition, staff recommend the addition of $3,500 per year to the Facilities Maintenance annual operating budget and up to $74,000, over two years, for the start-up costs of the Shaw Tower childcare program.
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Category 4: Social Service, Childcare, Cultural Facilities (Society owns building, City owns or leases land)
Agreement between the City of Vancouver (the "City")
and
______________________ (the "Society")
DRAFT TERMS
Term: Five years commencing _______________renewable for two further five-year terms.
Rent: $10.00 payable in advance
Land: ____________________________________
Building: The building(s) situated on the Land.
Lease/sublease/license:
The City to grant:
_ a lease/sublease/license of the Land as shown on plans to be appended to the Lease for the purposes set out in the Use section below.
_ the Agreement will not be registered in the Land Title Office.
Use:
The permitted use of the Land is restricted to:
_ the operation of a __________________________facility (the "Facility") within the Mandate and Public Service Objectives established by the Society appended to the Agreement as a schedule and approved by the City (see below); and
_ purposes necessarily incidental to the operation of a Facility and permitted within the applicable zoning.
Public Service Objectives:
As part of the Agreement, the Society's Mandate and Public Service Objectives (draft to be provided by the Society for City approval) shall be included and used by the City as annual and periodic performance measures. The Society may amend the Mandate and Public Service Objectives from time to time with prior written City approval.
The Agreement shall identify Public Service Objectives including:
_ hours of operation;
_ type and range of services;
_ process for community input;
_ administrative capacity;
_ financial accountability;
_ financial viability with evidence of diversified revenue sources; and
_ quality, accessibility and affordability or programs and services.
Laws, Regulations and Requirements
The Society shall comply with all laws and regulations relating to its operation of a Facility and shall provide evidence with such compliance on request by the City. The Society shall also comply with any requirements imposed on the Society by the City as Landlord in connection with the Society's operation of the Facility on the Land including the obligation to comply with all federal, provincial and municipal laws and by-laws including the British Columbia Human Rights Code which prohibits discrimination in many areas including in publications which are likely to expose a person or a group or class of persons to hatred or contempt because of the race, colour, ancestry, place of origin, religion, marital status, family status, physical or mental disability, sex, sexual orientation or age of that person or that group or class of persons. If there is a head lease, the Society shall be obliged to observe and comply with the applicable terms of the head lease in order that the City is not in default under the head lease.
No Assignment or Subletting:
The Society may not assign or sublet any portion of the Building(s) and/or Land without the City's prior written permission.
Insurance:
The Society shall also be responsible for insuring the building against fire and vandalism; all equipment, fixtures and furniture and shall be required to maintain comprehensive general liability insurance as well as all risk broad form tenant's legal liability insurance in the amounts and types to the satisfaction of the City's Director of Risk and Emergency Management.
Utilities, Janitorial, Maintenance and Repairs:
A Service Agreement shall form a Schedule to the Agreement and shall itemize both City and Society obligations for utilities, security systems, telephone, janitorial, maintenance and repairs.
In general, the Society shall be responsible for all utilities, security systems, janitorial services, landscaping, snow removal, all maintenance and repairs including major capital repairs such as roof replacement, building envelope repairs, foundations, infrastructure services (water, sewage, power) and building systems.
The Society shall be required to set aside an adequate maintenance reserve within its annual operating budget to meet the obligations in the Agreement.
Improvements:
Prior to the Society making any alterations, erections or modifications (hereinafter collectively referred to as "Improvements") to the Building and/or Land, the Society shall obtain the City's written consent. In giving its consent, the City may as such attach conditions or deadlines as it sees fit and the Society shall be responsible for all cost of Improvements, and claims or liabilities of any kind arising from the Improvements.
Reporting to the City:
On or before December 31 of each year, or at any time requested by the City, the Society will provide to the City the following:
_ Board-approved financial statements for the previous year, prepared at the Society's expense by an accounting professional. Such statements shall include all operating, capital, maintenance reserve and special purpose funds and shall itemize administrative and program costs;
_ a balanced annual budget including an estimate of all revenues and expenditures;
_ a summary of activities for the past year demonstrating how the Society has fulfilled its Public Service Objectives;
_ evidence of a functioning/governing Board of Directors; and
_ a summary of planned activities for the coming year. Further, if requested by the City, the Society shall submit to the City minutes of all Board meetings.
Indemnification:
The Society shall indemnify the City for any costs, losses, suits, or expenses incurred by the City arising as a result of the Society's use and occupation of the Land and related City property.
Early Termination:
The City may terminate the Agreement prior to the end of the Term on the happening of any one or more of the following events:
_ the Society is in default on any payments owed to the City following 30 days notice;
_ termination of the head lease, if any;
_ the Society defaults in performing any other provision of the Agreement, including, without limiting the generality of the foregoing, failure to comply with any laws or regulations relating to its operation of a _________________facility;
_ the Building and/or Land are not operated as a ______________________facility for more than 30 days without the City's prior written consent;
_ the Building and/or Land are not used in the operation of a ______________________facility to the satisfaction of the City;
_ the Society becomes bankrupt, is wound up or dissolved;
_ by mutual consent; and/or
_ substantial destruction of the Building and/or Land.
Options to Renew:
The Society may only exercise its options to renew if it is in good standing under the Agreement.
Additional Provisions and Qualifications:
The Agreement shall contain such other terms and conditions as may be satisfactory to the City's Directors of Legal Services, Real Estate, Facilities Design & Development, Social Planning and Risk and Emergency Management, it being noted that no rights or obligations hereby arise or take effect until the Agreement has been executed by both the City and the Society. The foregoing represents typical terms and provisions. The City reserves the right to vary such terms and provisions in its sole discretion depending upon the individual tenant as well as the individual building and/or lands that are being leased/subleased/licensed.
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